Connected lending and concentrated control

Dheera-aumpon, Siwapong

doi:10.1016/j.jfs.2013.07.005

Cited by 5 publications

(6 citation statements)

References 20 publications

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“…The coefficient of Hofstede Collectivism is always positive but is not always statistically significant. This suggests that the need for special connections with banks is different from the corruption of bank officials as suggested by Dheera-aumpon (2013Dheera-aumpon ( , 2016. Specifically, Hofstede Collectivism was significantly positively related to the corruption of bank official, as shown by Zheng et al (2013), but it was not significantly related to the need for special connections with banks, as shown in this paper.…”

Section: Effects Of Collectivism On the Need For Special Connections contrasting

confidence: 50%

“…The corruption of bank officials not only undermines the integrity of bank lending, but also the prevalence of connected lending. It has been investigated by a number of studies such as Charumilind, Kali, and Wiwattanakantang (2006), Cull, Haber, and Imai (2011), Dheera-aumpon (2013Dheera-aumpon ( , 2016, Hamada and Konishi (2010), La Porta, Lopez-de-Silanes, and Zamarripa (2003), Laeven (2001), and Maurer and Haber (2007). All of these except Dheera-aumpon (2013,2016) are country-focused studies.…”

Section: Introductionmentioning

confidence: 99%

“…All of these except Dheera-aumpon (2013,2016) are country-focused studies. Conversely, Dheera-aumpon (2013Dheera-aumpon ( , 2016 uses cross-country data on firms' perceptions of the need for special connections with banks to measure the prevalence of connected lending. Similar to the corruption of bank officials, Beck, Demirguc-Kunt, and Maksimovic (2005) found the need for special connections with banks to lower firm growth rates.…”

Section: Introductionmentioning

confidence: 99%

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Collectivism and connected lending

Dheera-aumpon

2019

Research in International Business and Finance

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National culture may affect the prevalence of connected lending. This study aimed to assess the effects of national culture, especially collectivism, on the need for special connections with banks, which is a measure of connected lending. The researcher obtained national culture data from both Hofstede's work and the GLOBE project. Using data covering more than 5000 firms in 51 countries, this study found that GLOBE Institutional Collectivism decreases the need for special connections, while Hofstede Collectivism and GLOBE In-Group Collectivism do not. This suggests that the need for special connections with banks is different from the corruption of bank officials.

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Section: Effects Of Collectivism On the Need For Special Connections contrasting

confidence: 50%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Collectivism and connected lending

Dheera-aumpon

2019

Research in International Business and Finance

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“…The response takes a value of one if the answer is no obstacle, a value of two if it is minor obstacle, a value of three if it is moderate obstacle, and the value of four if it is major obstacle. It is important to note that the corruption of bank officials is different from the need for special connections with banks as shown by Dheera-aumpon (2013Dheera-aumpon ( , 2016.…”

Section: Corruption Of Bank Officialsmentioning

confidence: 99%

Humane Orientation and Corruption in Bank Lending

Dheera-aumpon

2017

Economics &Amp; Sociology

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ABSTRACT. Corruption in bank lending can seriously adversely affect credit allocation. Besides banking factors, national culture can also affect the corruption of bank officials. Prior studies have shown that collectivism increases bank corruption. This paper aims to assess the effects of cultural dimensions, besides collectivism, on the corruption of bank officials. Instead of using Hofstede's cultural data, this paper uses the data from the GLOBE project which is more recent and reports more cultural dimensions than Hofstede's. Using the data covering more than 3000 firms in 32 countries, this paper finds that humane orientation increases the corruption of bank officials. The effect of humane orientation on the corruption of bank officials is not only statistically significant but also economically relevant. The magnitude of its effect is relatively comparable to that of collectivism.

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“…The result, therefore, suggests that aggregate productivity can be improved by reducing connected lending. To reduce connected lending, Dheera-aumpon (2013) suggests that the control rights of banks' controlling owners should be decreased.…”

Section: Resultsmentioning

confidence: 99%

Connected Lending and Aggregate Productivity

Dheera-aumpon¹

2015

Economics &Amp; Sociology

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ABSTRACT. The issue of connected lending is shown to be prevalent in many countries. This paper documents that in cross-country data connected lending is negatively associated with aggregate output and aggregate productivity. A model incorporating connected lend is presented and used to quantitatively study the effect of connected lending on aggregate productivity. The results show that connected lending has a moderately negative effect on aggregate productivity and can be better explained by the crony view than the information view. This implies that special connections between firms and banks generally do not reduce the asymmetric information between them.

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Connected lending and concentrated control

Cited by 5 publications

References 20 publications

Collectivism and connected lending

Collectivism and connected lending

Humane Orientation and Corruption in Bank Lending

Connected Lending and Aggregate Productivity

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